More car insurance refunds possible for Michigan drivers, state says

LANSING, Mich. (FOX 2) - Michigan auto insurance companies reached their deadline to issue $400 refund checks this week. However, it might not be the end of money that drivers could receive.

According to Anita Fox, the director of the agency that oversaw the dispersal of $3 billion in refunds, her team will continue to audit funds held by the Michigan Catastrophic Claims Association over the summer. If the amount of money held exceeds what is needed to cover expected costs, then the Department of Insurance and Financial Services could order another refund.

"It's not impossible that there will be additional savings, but this was an extraordinary amount of money saved as a direct result of the reforms," said Fox. 

The most recent refund issued to drivers was because of the MCCA's surplus of billions of dollars they reported in 2021. Any additional refund amounts DIFS could order likely won't be as big as the $400 that was sent back to drivers this past spring.

While the deadline has passed, Fox said her agency's work isn't done and would be following up with drivers and insurance companies to make sure all available refunds made it to respective drivers. 

It's the latest step in what she described as an "extraordinary" effort by the department overseeing a massive transfer of funds to millions of drivers. Fox said the state has issued a refund in the past, but not to the level it did this year.

"It was a big lift to get individual checks and electronic transfers to millions of drivers," she said. "There had to be tight controls, so the right amount of money was refunded."

That includes implementing more cost controls in insurer plans, reconciling how much money each auto insurer owed how many drivers, and setting up a deadline that got money to residents in a timely fashion while giving companies enough time to issue the refunds.

The department also needed to navigate the best way to keep drivers from being scammed.

"Every time money changes hands, there will be those who try to take advantage," Fox said. "We heard anecdotally through the Attorney Generals' office right from the beginning that people were getting unsolicited calls, so we told consumers ‘don’t give out personal information over the phone or at the door.'"

RELATED: Michigan's $400 auto insurance refund check deadline is Monday

Anyone left with questions about their refunds or still didn't receive a check but were eligible will need to contact their insurance company first. If issues remain, then drivers are advised to call DIFS hotline at 833 ASK DIFS (833-275-3437) M-F from 8 a.m. to 5 p.m.

Michigan remains the only state to offer the option of unlimited benefits for those catastrophically injured in a crash. Prior to the 2019 reforms negotiated between Gov. Gretchen Whitmer and the Republican-led legislature, Michigan drivers were required to choose an insurance plan that offered unlimited injury protection coverage.

The reforms, which lifted that requirement, led to lower premiums. It also led to the MCCA's $5 billion surplus. 

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The MCCA's fund that cares for people who were catastrophically injured in crashes ended up with a higher surplus due to those reforms, Fox said. As a result, it overestimated how much it would need to cover potential claims for long-term care. The trust has about $24 billion in total.

As a result, last November the group was told to refund the maximum surplus they could while maintaining enough money to cover claims plus a little extra cushion in case.

When DIFS audits the group, they'll be looking if MCCA exceeds 120% of expected liabilities from claims.